For a couple of weeks now, the president has been promising — or threatening, depending on how you look at it — to accomplish by executive order what the Republican Congress has failed to achieve this year: liberating a lot of Americans from the horrors of Obamacare, and letting them buy insurance across state lines — one of the few health-care strategies Trump has consistently supported.
Now the moment seems to be nigh, and although there are a fair number of questions we cannot answer until the executive order is formally released, the basic idea appears to be an expansion of the kinds of entities who can take advantage of so-called “association health plans” — group insurance plans normally available to trade associations and other groups of businesspeople — and then a reclassification of these plans so that they do not have to comply with Obamacare regulations. It’s sort of a Great Escape from Obamacare for small businesses and perhaps even individuals (one of those hazy details we don’t know yet).
The across-state-lines aspect of this plan — a big deal in the pre-Obamacare days when there were few if any national standards for health insurance — would not be nearly as significant as the exemption from Obamacare’s essential health benefits and preexisting-conditions requirements. And virtually everyone who has looked at the idea believes it would mostly attract younger and healthier consumers seeking cheaper and skimpier health plans, leaving older, sicker, and therefore more expensive people to sink the remaining Obamacare exchanges with their costly problems.
That would be just fine with a lot of conservatives, such as Kentucky senator Rand Paul, who not only considers Obamacare to be an abomination, but who has always been a fan of association health plans as a way for businesses and, potentially, individuals to band together and get around state health-insurance regulations. Giving the same people a way around national Obamacare regulations makes the whole idea a double treat for those who believe spreading risk among the healthy and the sick is socialism.
The idea of expanding and deregulating association health plans as a stand-alone initiative is especially dangerous when pursued separately from other conservative health-reform ideas that might help counteract some of its effects, such as subsidies for high-risk pools for “left behind” people with preexisting conditions, or more money for states to come up with their own ways of managing risk.
Depending on its scope, Trump’s plan will almost certainly attract legal challenges as an effort — which it most definitely is — to thwart a law with an executive order. But it’s still a real threat to the poorer and sicker people who rely on Obamacare.
Health-policy wonk Tim Jost said of the proposed executive order that it would “destroy the small-group market …. We’ll be back to where we were before the Affordable Care Act.” That’s sort of the big idea here, though it’s unclear if its proud author understands.